Getting What You Pay For

Fierce competition has driven commissions to surprisingly cheap levels. Free trades are becoming available. However, trading costs are far from the only consideration when choosing a broker.

Speedy and accurate trade execution, research tools, margin lending policies, and solid customer service can outweigh the value of cheap trades. Moreover, getting a better interest rate on uninvested cash can more than makeup for any commission costs.

At some brokerage firms, cash paid in interest and dividends is swept into accounts yielding 1% or less, unless you request something different.

NOTE: Pay attention to the rates you are paid, and if your cash is earning a low interest rate, have cash distributions swept into a money market fund paying a competitive yield.

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